Culture First: Tips on Nonprofit Merger Success through Organizational Cultural Integration Too often people think of nonprofit mergers as a frantic survival strategy for organizations in a state of financial crisis. However, robust nonprofit organizations are using a range of partnership, consolidation and strategic alliance models not to survive, but to thrive. In early 2015, AIDS Network and AIDS Resource Center of Wisconsin (ARCW) announced their merger, supported by a grant from the AIDS … Continue reading “Culture First: Tips on Nonprofit Merger Success through Organizational Cultural Integration” Too often people think of nonprofit mergers as a frantic survival strategy for organizations in a state of financial crisis. However, robust nonprofit organizations are using a range of partnership, consolidation and strategic alliance models not to survive, but to thrive. In early 2015, AIDS Network and AIDS Resource Center of Wisconsin (ARCW) announced their merger, supported by a grant from the AIDS United Sector Transformation Initiative. The organizations were not in crisis. The merger goal was to combine two strong organizations and expand services to patients and clients. “Wisconsin has always been a national leader in the fight against AIDS. Our merger will enhance this leadership position. By combining the best of our two organizations, we will enhance services, improve clinical outcomes, and generate new financial resources, all of which are critical as we continue on our quest for a world without AIDS.” – ARCW President & Chief Executive Officer Michael Gifford. Some Merger Integration Do’s and Don’ts Vista Global Coaching & Consulting facilitated the negotiations and the organizational integration for AIDS Network and ARCW. The continuity of consulting support over the course of both phases expedited the entire process. The timeframe from the initial conversation of the negotiation team to the celebration of the merger integration process was 18 months. Although the process was efficient, it was not without intention and focus. Don’t Ignore Culture in the Negotiation Phase Honor important cultural elements of pre-merger organizations. Surface and address historical challenges in relationships between organizations to move forward in creating a new narrative. Sensitivity to power imbalances and strategies to mitigate those imbalances from the beginning of negotiations, sends the clear message to staff of both organizations that we are in this together to create a stronger organization that will better serve clients. It is important to build relationships among the negotiation team members and develop a shared vision. Crafting ‘Strategic Intent Statements’ supports transparency and documents a process rooted in good faith which allows the group to point to that shared intent when there are bumps along the way. Do Make Culture the First Priority in Integration It is easy to launch into the systems and structural integration elements of combining two organizations but there is great risk in not putting emphasis on culture as the first priority. Without this focus, it is easy for staff to stay locked in the pre-merger cultures and fall into “us v. them” perspectives. Building an integrated culture is critical for long-term success. Cultural integration requires intention, structure and tools to support the transformation. To begin a cultural integration process, it can be helpful to use an assessment tool that provides an objective framework of the cultures of the combining organizations. In the AIDS Network-ARCW integration process, we used the Organizational Culture Assessment Inventory (OCAI). The tool allowed the merger integration team to look at the existing cultures and determine the preferred culture moving forward. Identifying the vision of the preferred culture and the behaviors and beliefs that align with that preferred culture sets the course for “being the change we want to see” in the new organization. Leadership Takeaways and the Return on Investment Leaders need to understand when it is important to push for rapid changes and when it is more important to pause, listen, and allow members of the organization time to process. In the integration phase, building a “guiding coalition” of staff from all levels of both pre-merger organizations is a critical success factor. The ARCW Merger Integration Team had 14 staff members. These individuals became the change agents as the structural integration process began. Eight work groups were established that included approximately 50% of all employees. Even though ARCW is a statewide organization with 10 offices, every staff member was engaged in the integration process. Strong nonprofits considering merger will be most successful if they go beyond just negotiations and invest financial resources, time, and staff in the integration process. Invest in a structure of internal leadership combined with external consultant support. Create early wins before and after the merger to maintain the momentum necessary to build a new organization. Organizational culture can be abstract or intangible. A nonprofit’s culture is the sum of many parts. For a successful cultural integration, leaders need to acknowledge the value of each part. The successful AIDS Network and ARCW merger integration is proof that cultural integration is possible when leaders invest in the process. What is your experience in cultural integration? We would love to learn more from you about this critical success factor. Contact Mary today!
